In what has become a recurring story line for the Denver-based, 30- member company, it is facing potentially crippling budget shortfalls.

“I feel like we had so many things going in the right direction, and then: Wham! Like every other arts organization, we took this big hit (from the recession), and it’s a struggle,” said board chairwoman Denise Sanderson.

The facts:

• In 2008-09, the company suffered a budget deficit of about $500,000.

• Individual contributions decreased that year from $1 million in 2007-08 to $400,000 — a 60 percent drop.

• The company owes $250,000 in back rent to Denver for use of the Ellie Caulkins Opera House.

“I would not deny that those are difficult numbers to overcome,” Sanderson said. “It’s a challenging time. No one is running away from the challenge.”

She is serving as the company’s administrative head in the absence of former executive director Jack Lemmon, who was apparently fired in October after 10 months on the job. A search for his replacement is underway.

To try to bolster the bottom line in the short term, the ballet recently laid off four of its 19 full-time administrative employees. The cuts are expected to save $100,000 to $150,000 during the remainder of the 2009-10 fiscal year.

These latest reductions came on top of $100,000 in trims the company made in April 2009, when it laid off one full-time and one part- time staff member and instituted two- and four-week furloughs.

“While it will stretch the existing employees, who will all have to work a little harder, everyone is saying, ‘OK,’ to keep the ballet they love here,” Sanderson said.

At the same time, she said, a board committee has begun a long-term restructuring of the company. Sanderson was not ready to detail what changes might be on the way.

Holiday rumors

Word circulated in the arts community in December that the ballet was on the verge of closing its doors at the end of the month. Such rumors were likely fueled in part by on- stage appeals for contributions during “The Nutcracker” and the unusual sight of costumed dance students collecting money at the doors as audiences exited.

But Sanderson denies the company was in danger of disbanding then. Nor is it now, she said.

“We are committed to keeping Colorado Ballet here,” she said. “I can also tell you that not only have the trustees stepped up with their expertise, many have made additional donations over their pledges. That’s encouraging.”

Other positive signs she pointed to include an increase in total attendance for “The Nutcracker” from 41,763 in 2008 to 43,598 in 2009 (though ticket revenue declined 7 percent because of discounting) and an unspecified boost in December donations over the year before.

A too-familiar dance

If the ballet’s fiscal troubles sound familiar, there’s a reason. The company ran a $341,000 deficit and saw its accumulated debt reach $700,000 in 2004-05, a year that included the controversial firing of artistic director Martin Fredmann. Two years earlier, it suffered a budget deficit of $497,000.

“They don’t seem to deal with the fundamentals,” said Jim Copenhaver, a former executive director of the Colorado Symphony who is now an arts consultant. “Therefore, they get a short-term burst that sounds good or feels good, but they don’t have the strength to deal with the downsides that come along.”

As a longtime board member, Sanderson said that she has witnessed the ballet’s budgetary highs and lows and knows full well that the company needs to achieve a financial solidity that will allow it to absorb inevitable financial hits.

“I’ve been here for all of those cycles, and that’s why the board is now committed to a restructuring of the organization and getting it right — not just saying we’ll hire someone new (as executive director), and they’ll fix it,” she said.

Copenhaver lays the fault for the company’s ongoing struggles at the board’s feet.

“Generally speaking,” he said, “the board is just not good enough. It doesn’t think strategically. It doesn’t function strategically. It doesn’t get outside the narrow frame of people who have been associated with the ballet.”

With its repeated financial crises, he said, the ballet runs the danger of alienating donors, especially those asked for bailouts in the past.

“There’s a real risk there,” he said. “Certainly, the marginal contributors wonder if the money is going down a rathole or not, particularly when it (the budget gap) is recurring, as has been the case.”

Hugh Grant and Merle Chambers were one of three couples who each made $150,000 challenge grants to help the ballet recover in February 2006.

But Grant does not foresee making a similar contribution this time. While he hopes other donors will step forward to help, he also believes the ballet needs to take steps to avoid future financial plunges.

“They’ve got to take preventative measures in order not to be in this same condition,” he said.

Sanderson is confident that the planned structural overhaul will reassure any potential contributors with doubts about the company’s future fiscal viability.

“I really do believe,” she said, “that donors will see that the changes we are making — all of which are not ready for full exposure yet — will reset the organization, and they will say, ‘Now, I can give to you, because you are now taking the necessary steps and doing the right things to put Colorado Ballet on the right course for the next 50 years.’ “

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